Tuesday, June 24, 2008

Rio Tinto Ltd says it could develop India's first world-class diamond mine after lodging a mining lease applications for its Bunder diamond project in that country.

It also announced a diamond mineralization exploration target at the project of between 40 million and 70 million tonnes at a grade of between 0.3 and 0.7 carats per tonne. This is three times greater than the grade at India's only other hard rock diamond mine, Panna.

The Bunder project was discovered in 2002 and the results of an `order of magnitude' study are expected by the end of the third quarter of calendar 2008.

A pre-feasibility study will follow, involving social and environmental studies.

Environmental approval for a 10 tonne-per-hour dense media separation plant is expected soon from the Madhya Pradesh provincial government, which will allow the processing of bulk samples at the project site.

"We have spent more than 100 crore rupees (more than $A26 million) over the last six years on diamond exploration and evaluation in India," Rio Tinto's managing director in India Nik Senapati said in a statement on Monday.

Rio Tinto produces diamonds at its Australian, Canadian and African mines, and processes the majority of these in India.

"Rio Tinto's strategic alliance with the Indian diamond industry, built over the past 25 years, has enabled it to gain a deep understanding of India as the world's largest diamond cutting centre and as one of the key emerging markets for diamond demand," the company said in a statement.